The week may be a contrarian week
This week may be a contrarian week. On Tuesday, CPI releases and is forecast at 1.2% m/m. Last month's print was 0.8% m/m. There are also Fed officials speaking - Brainard on Tuesday and Mester on Thursday. Given the higher expected inflation, the Fed speakers are likely to continue preparing the market for the tighter policy with hawkish comments. However, markets are forward-looking, and we think last week saw a fair amount of discounting.
Consider the US 10Y:
Source: www.tradingview.com
The yield has moved up quickly over a relatively short period, to the point that the RSI is overbought (blue rectangle). This extreme suggests that short sellers will look to book profit shortly and may use this week's calendar as a catalyst. I.e., the market may have already discounted this week's releases into price. If so, the scheduled announcements, whist introducing the prospect of volatility, may result in surprising price moves. We, of course, continue to monitor.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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